Visitors to the semi-detached mock-Tudor home in the shadow of Wembley Stadium are greeted with a sign by the front door that says "Salam", which means peace in Arabic and is a clue to the origin of one of the property's former occupants.
Ali Al Khwildi lived in the four-bedroom home, which is about a 10-minute walk up a steep hill from the stadium. He stayed there between 2016 and 2017 after fleeing his post as a director of Iraq’s Communications and Media Commission (CMC).
On the other side of London, in the quiet town of Banstead, there is a larger detached property, now with a weed-strewn drive and ramshackle garden, complete with bird bath. The building was bought for £1.5 million ($1.9 million) a decade ago as a home for Safa Rabee, who also worked for the commission.
What the two properties have in common, The National can reveal, is that they were used as bribes to ensure their Iraqi occupants helped to enable an $810 million fraud. Mr Rabee and Mr Al Khwildi are implicated in a multibillion-dollar set of financial claims swirling around Korek Telecom, one of Iraq's biggest mobile phone operators.
Fateful decision
Mr Al Khwildi was chairman of the board of commissioners at the CMC when legal documents claim that, for his part in a conspiracy, he was handed the £830,000 property in north London.
At about the same time, the six-bedroom house in the name of Mansour Succar was bought in Banstead, in a viewing and sales process that heavily involved Mr Rabee's daughter Riham. She was copied into an email dated August 24, 2016, regarding the purchase of the property from the estate agent making the sale to the lawyer handling the transaction.
When private investigators not long after the Covid-19 pandemic turned up asking questions, details began to be revealed in Banstead.
Investigators were making polite inquiries about the residents of a large house on a pleasant street, where visitors to properties are greeted with immaculate English lawns. “The private investigator knocked on our door and asked us, ‘Do you know anything about him?' And, 'Has anyone come to visit?' There were suspicions. You know how the normal grapevine works," a resident on the street told The National.
Such suspicions were well-founded, as a trove of court documents and other records seen by The National has revealed an “extraordinary” conspiracy of powerful Iraqis and their associates to push out foreign investors from one of the most lucrative communications networks in the country. The International Chamber of Commerce arbitration panel in 2023 said the scheme to defraud the investors was based on bribing the regulators of Korek.
The foreign investors formed a company called Iraq Telecom, a joint venture between France’s Orange and Agility, a Kuwaiti company, for the purpose of investing in Korek, based in the Kurdish region of Iraq.
The arbitration court ordered Sirwan Barzani, a businessman and military leader, and Korek to pay Iraq Telecom $1.65 billion, and the Dubai International Finance Centre court has now thrown out a bid to overturn that decision.
The shakedown
Korek was issued a national licence in 2007 by the CMC, for which it was required to pay a licence fee of $1.25 billion. By 2010, Korek needed further financial and technical support and partnered with Agility and Orange, known as France Telecom at the time.
A new holding company – International Holdings – was established, to which Korek issued all of its existing shares and the shares issued in return for the investment. The two companies invested about $810 million for an indirect 44 per cent minority stake in Korek, with the rest held by the company's Iraqi shareholders. Mr Barzani held the largest stake.
The complex financial deal also involved loans to Korek and the securing of the right to receive interest payments on company debts.
The agreement, which was concluded in March 2011, also included what is known as a call option that would allow it to buy more shares and take control of Korek. The phone operator is controlled by a prominent member of a major Kurdish political dynasty. Mr Barzani, 54, is the leader of the region's defence forces and a nephew of a former president of Iraqi Kurdistan, Masoud Barzani.
He is regarded as one of the foremost Peshmerga commanders and fought against Saddam Hussein’s forces for a decade, earning the nickname "Black Tiger" in the process. He stepped back from the military ranks in 2000 and in the same year founded Korek, along with two partners, in the Erbil province of Iraq's Kurdish region.
By 2013, Mr Barzani and the long-standing shareholders of Korek wanted to prevent the international partners from exercising the majority stake option over the company. By December, they were actively attempting to prevent Iraq Telecom from taking control.
They decided this could be achieved “through cash payments and real estate transactions for the benefit of high-ranking CMC officials”. The CMC became increasingly hostile to Iraq Telecom’s involvement with Korek, according to evidence presented to the tribunal.
A letter signed by Mr Rabee to Korek in December 2013 alleged that Korek, Agility and Orange failed to fulfil the conditions under which the investment had been approved. But the court heard that this apparent hostility was “engineered” by Mr Barzani behind the scenes, with one outcome in mind – to thwart the call option.
At about the same time, $18.6 million had already been transferred to IC4LC, a Lebanese law firm that was in reality a front for funnelling bribes to the CMC, the arbitration tribunal said.
In May 2014, Orange issued a statement indicating that it anticipated obtaining a majority holding in Korek. But in July, the CMC announced its decision “to revoke partnership between Korek” and Orange and Agility, and declared that it was “null and void”.
The CMC ordered Korek to “reinstate” its status before the deal with Orange and Agility and “terminate” any deals assigning shares to the companies. The letter was signed by Mr Rabee and issued in the name of the CMC Council of Trustees, led by Mr Al Khwildi.
In a further notice in August, the CMC ordered that Orange and Agility’s shares “be returned to their original owners” – in other words, Mr Barzani and his associates. “While directed at Korek, the ultimate effect was the expropriation of IT Ltd’s [Iraq Telecom] interests,” the tribunal said.
Kurdistan Companies Register issued a notice in March 2019 returning shares to the status they had before March 2011, with Mr Barzani receiving 75 per cent, Jawshin Barazany obtaining 25 per cent, and 5 per cent going to Jiqsy Mustafa.
The arbitration tribunal found that Korek and Mr Barzani "did bribe and corrupt CMC officials”.
Agility told The National that in "partnership with Orange, it invested hundreds of millions of dollars in Korek with the goal of turning the company into a world-class national mobile operator capable of driving the modernisation of Iraq’s telecoms sector".
"An arbitration tribunal of eminent lawyers determined that this bold project was destroyed by the malfeasance of Korek’s Iraqi shareholders," the company said in a statement. "We are pleased that this egregious behaviour of which Agility was victim is being untangled, and we hope that Korek and Sirwan Barzani will finally honour their obligations and redress the wrong that was done to us.”
Shadow of Wembley
The two CMC officials are alleged to have enabled the expropriation of Iraq Telecom’s assets, the tribunal found, revealing how the pair subsequently fled to London.
On August 12, 2014, "properties were identified by members of Al Khwildi and Rabee families” for purchase as homes in the UK, according to the tribunal. Mr Al Khwildi found his own property, while Mr Rabee’s was found by his daughter.
The first deal secured was for Mr Al Khwildi and began when a lawyer acting for Raymond Rahmeh wrote to a colleague saying the Lebanese businessman “has a friend who wants to buy a residential property in London”. The friend’s name was Pierre Youssef, but an employee of Mr Rahmeh at his ZR Group said the “first approach” to the real estate agent was through Mr Al Khwildi, according to the arbitration tribunal's judgment.
The seller was seeking £790,000 but Mr Rahmeh’s employee stressed “the need to complete the deal ASAP”, with £830,000 eventually handed over.
UK land registry records show Mr Youssef remains the owner and an address in Lebanon is given for him. The electoral roll shows Mr Al Khwildi and his wife Zahira Kasim stayed at the property in 2016 and 2017.
A neighbour across the road recalled striking up a conversation with a woman she believed to be Ms Kasim, when she picked up a parcel. “Then one day they were gone and I heard they had gone back to Iraq, which I thought was surprising given the situation there,” the neighbour said.
In its ruling, the tribunal said it was “persuaded that the evidence overwhelmingly invites the inference that the property transactions were arranged as bribes" to Mr Al Khwildi and Mr Rabee.
Leafy suburb
Meanwhile, Mr Rabee and his family had also been busy in the London property market. Mr Rahmeh's employee in 2016 wrote to the lawyer handling the Banstead property saying they were planning to purchase it through a Cayman Islands company, a plan that was to change in light of the UK government’s attempt to crack down on such deals in transparency legislation.
The court was told that Ms Rabee “viewed the property” in 2016 and the documents submitted show the agent for the property “clearly believed that Ms Rabee was the intended purchaser”.
An address for Mr Succar on the sale document was originally given as an apartment in the Edgware Road area of London that belongs to Ms Rabee’s husband Muhammad Najim, but that was changed to an address in Lebanon. That address remains on the Land Registry title to this day.
The deal for the property went through in December 2016 and the title deeds were sent to the ZR Group’s address in Lebanon.
The six-bedroom property is currently unoccupied and neighbours say it has been neglected for some time. Its shabby exterior is in stark contrast to the well-ordered greenery of the neighbourhood. Children’s toys remain propped up in the corner near the window of an empty room.
Neighbours were happy to talk, but none wanted their names to be used “for fear of reprisals”, as one put it. One recalled a parcel being delivered to his house that was meant for the Rabees' property.
“A Middle Eastern bloke came to the door but wasn’t very friendly. I never saw him again after that,” he said.
One another occasion, a pipe in the Rabees’ house burst and water leaked into his property. “A woman turned up at our door to give us £50 for the plumbing in cash," he said.
Another neighbour remembers people moving in and then the property being rented to another family. She also recalls speaking to Mr Rabee’s son Hussein. “We had a really nice chat and he told me he was going to university,” she told The National.
Suspicion grew after there was a burst of activity, with people moving in and out, and then nobody at the property. "They all disappeared” the neighbour added. “We all thought it was a bit suspicious, because nobody leaves a house like that untouched for several years."
Another neighbour said: “We always thought there was something dodgy about the sale and it might be tied up to organised crime. The previous owners disclaimed all knowledge of who they had sold it to, which was strange.”
It was not just the neighbours who became suspicious about the property. By now, Iraq Telecom had begun legal action to recover its investment – and it put private investigators Raedas on the case.
It put the property under surveillance, taking photographs of the Rabee family, as well as making discreet inquiries. Riham Rabee was photographed at the property in September 2019, after driving there in a Mini Cooper. A removal company was seen at the property as well, at about the time Iraq Telecom’s claim became public.
The tribunal said it was “satisfied that the evidence demonstrates that it was Al Khwildi and Rabee families that benefited and were intended to benefit from the two properties”. Its judgment said Iraq Telecom's case “has presented cogent circumstantial evidence that the London property transactions were bribes” to Mr Al Khwildi and Mr Rabee, and that the tribunal “agrees” with the claim.
“The acts performed to carry out the conspiracy were unlawful,” the tribunal added.
Raymond Rahmeh and the 'sham' law firm
A constant presence lurking in the background of the bribery of the two officials is Raymond Rahmeh and the law firm IC4LC. Mr Rahmeh is a Lebanese businessman who, along with his brother Teddy, was last year placed under sanctions by the US Treasury Department, which accused them of profiting from public corruption.
Mr Rahmeh is described by the court “an associate” of Mr Barzani and, when it came to the purchases of the property, his “involvement in the transactions is only explicable as that of a conduit for the bribes”.
The court found Mr Rabee and Mr Al Khwildi also received substantial amounts of money as bribes, in addition to the properties. This was “funnelled” through IC4LC, described as a front and a “Rahmeh-related entity”.
“It had no regular features of a law firm, but instead was a sham vehicle for passing millions of dollars by way of illicit payments to members of the CMC who were engaged in the issuance of the CMC decision,” the tribunal said.
A person described as a “senior counsel” with IC4LC “clearly has a very close relationship" with Mr Rahmeh and his brother "was the individual who registered IC4LC’s domain name”.
Payments were transferred by means of invoices from Korek, such as a $6 million “success fee”, as well as “legal and consulting fees”.
Between 2013 and 2016, IC4LC was paid $21.9 million and the tribunal said there was a “confluence” between the payments, the property purchases and the actions of the CMC.
The judgment said that evidence on the record, combined with the failure of the respondents to produce documents “warrant an inference that a substantial portion of the amounts recorded as legal and consulting fees were in fact payments” to the two officials. The court found that, by procuring the CMC decision through bribery and corruption, Mr Barzani breached his obligation under Dubai law to “act honestly, in good faith and lawfully, with a view to the best interests of the company”.
Korek’s defence
Iraq Telecom began legal action against Korek and Mr Barzani and it was represented by law firm White & Case. The firm requested arbitration in 2020 and the proceedings were wrapped up at the end of 2022.
Mr Barzani and Korek stated in their defence that Iraq Telecom failed to establish any link between them and the properties or that these were paid as bribes to the two officials to influence the CMC decision. One of the main thrusts of the defence was that “central” to the claims was evidence given by Nicholas Bortman, the co-founder of Raedas.
Various claims including the purchase of the properties as bribes for the two officials are said to “rest entirely” on his evidence.
The court heard Mr Bortman and his colleagues interviewed current and former employees of Korek and the CMC, who all “feared for their security if their identities were revealed”. But the respondents told the tribunal that “much of the evidence is multiple hearsay” and that the manner in which it was gathered renders it “inadmissible”.
Iraq Telecom’s refusal to disclose the identities of the sources has prevented the respondents from making any submissions regarding the credibility and reliability of those sources, the lawyers argued.
They also allege that Raedas “engaged in widespread and pervasive unlawful and criminal conduct in obtaining the evidence”. Mr Bortman’s evidence came from third parties without “direct knowledge” of what actually happened, they alleged.
Raedas, it was claimed in hearing, made "large cash payments and other inducements to its sources in return for information”.
In their judgment, however, the tribunal said its findings were made “without reference to or reliance in any way" on Mr Bortman's evidence.
It was also claimed the political and military situation at the time the CMC decision was issued was relevant, with Iraq under attack from ISIS. Mr Barzani was combining his role as Korek's managing director with fighting against the terrorist group so “bigger problems to deal with".
But the tribunal dismissed this claim and said it "does not regard this as a credible excuse”.
Leases were also produced by the respondents that purported to show Mr Rabee and Mr Al Khwildi rented the properties, but again this was dismissed by the tribunal.
Mr Barzani declined to attend the tribunal to give evidence or to submit himself for cross-examination, but gave three witness statements in which he responded at some length to the allegations advanced by Iraq Telecom. He set out what he described as his “deep disappointment with the way these proceedings have been conducted and my lack of faith that these proceedings are conducted fairly towards me”.
CMC corruption
It seems the bribes they received from Korek were not the only corruption Mr Al Khwildi and Mr Rabee were involved in. The pair were dismissed from the CMC in 2021 and were charged with corruption mainly in dealing with telecoms companies, a senior official told The National.
They were accused of “irregularities and taking bribes” mainly from the three companies – Zain Iraq and Asiacell, as well as Korek. But no official measures have been taken against them, mainly due to political pressures, the official added.
In April 2017, the Iraqi parliament voted to sack Mr Rabee, a member of the Islamic Dawa Party, after accusing him of “taking bribes and commissions” from the three companies in 2015. In April 2022, he was killed in a car accident south of Baghdad.
The official added that Mr Al Khwildi was supposed to attend an inquiry at the parliament in January 2021, but he claimed he contracted had Covid-19. Later, the authorities announced that he fled with his family to Beirut.
“There have been corruption charges inside CMC, but the ones against these two officials were the most important ones,” the official told The National, without elaborating. Korek has been approached for comment.
Additional reporting by Sinan Mahmoud in Baghdad
